Preview: Due November 5 - U.S. October ADP Employment - Correction from September decline
We expect a rise of 30k in October’s ADP estimate for private sector employment growth. This would largely reverse a 32k decline seen in September suggesting the labor market maintains a picture of limited hiring and limited layoffs.
Three of the last four ADP reports have reported declines, but a rise of 104k in July more than fully offsets declines of 23k in June, 3k in August and 32k in September. We do not expect September’s non-farm payroll, when released, to be quite as weak as the ADP report, continuing to forecast a 45k rise overall, 50k in the private sector.
The last weekly initial claims total released, of 218k for the week to September 20, was the lowest since July 19, a sharp spike to 264k in the week to September 6, a week that included the Labor Day holiday, proving erratic. State initial claims have however continued to be released and suggests that trend in initial claims has not changed much. Underlying trend is still probably marginally positive.
We expect most components of October’s ADP breakdown to show little change, with slightly more positives than negatives. Health care has tended to lead recent non-farm payroll releases but has stood out less in ADP data. Overall however, payroll and ADP data has been reasonably consistent in the recent months through August.
